India Inc ill-prepared to manage contingent workforce, says study

Bangalore: Indian businesses are facing the most diverse work environment that they have ever seen. By 2020, there will be five different generations working together - each with different skills, experiences, work habits, and motivations. More of these workers will be freelancers and long-term contractors. All of this is unprecedented and represents a major opportunity for productivity, talent development and employee engagement. But according to new research from Oxford Economics, most companies are unprepared to capitalize on it, including those surveyed in India.

As revealed in Workforce 2020, an independent, global study by Oxford Economics with support from SAP SE, most companies recognize the importance of managing an increasingly international, diverse and mobile workforce. But the vast majority lacks the strategy, culture, and solutions to do so.

Compensation Matters Most

The most important benefits and incentives to Indian employees are: competitive compensation (66%), bonuses and merit-based rewards (61 percent), and vacation time (46 percent). And 49 percent of employees say higher compensation would increase loyalty and engagement with their current job.

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Millennials are Misunderstood

Forty-seven percentof Indian executives say they rely on younger employees or recent graduates to fill entry-level positions and 66 percent of executives say Millennials entering the workforce are impacting workforce strategy.

According to the survey, they may be out of touch with what Millennials think-42 percent of executives say Millennials will consider leaving their job due to lack of learning and development, but just 2 percent of Millennials say they have done so.

Talent Gap is widening

The need for technology skills will grow, but less than one-fifth of employees expect to be proficient in key areas in three years, including cloud, analytics and mobile. The push is on to fix this. Sixty-seven percentof Indian executives say their company widely offers supplemental training programs to develop new skills.

But employees are not convinced. Only 32 percent of those surveyed say their company provides the right tools to help them grow and improve job performance. Forty-two percent of employees say their company encourages continuing education and training to further career development.

Workforce is changing

As the economy evolves to a state where nearly everything can be delivered as a service, Indian companies are increasingly tapping external expertise and resources they need - and on an as-needed basis- to fill skills and resource gaps and to accommodate rapidly changing business and customer demands. That means more temporary staff, more consultants and contract workers, and even 'crowd-sourced' projects. In fact, of those companies surveyed as part of "Workforce 2020", 80percent of executives say they will be increasing the use of contingent, intermittent, or consultant employees.

Commenting on the findings, Bhuvaneswar Naik, Head of Human Resources, SAP India said, "SAP and Oxford Economics undertook this global study to better understand how organizations in India, and globally, can prepare for the emerging workforce. Businesses must understand the workforce of the future and its importance to bottom-line success."

"Some people become leaders by sheer determination, enthusiasm, passion, and they really get the rest of the people to learn. I think the majority of the learning really happens through work and not through formal programs. Once people start to collaborate and more people join in, it builds the culture by doing," said Aadesh Goyal, Global Head of Human Resources, Tata Communications, a participant in the study.

Workforce 2020 is a large-scale global study from SAP and Oxford Economics, to discover best practices and actual progress toward the creation of talent strategies for the future in the global economy.